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Royal Mail was a faller on Monday as the London market drifted lower in its quietest session of the year.
Growing fears of a national postal strike sent Royal Mail sliding 1.6 per cent to 386p. The Communication Workers Union will ballot members shortly on industrial action unless Royal Mail management “significantly shift their position” on pensions, pay and strategy, CMU general secretary Dave Ward said in the Huffington Post.
Industrial action is unlikely to harm Royal Mail much in the short term as letter and parcel volumes will shift to other days, said Liberum.
However, the broker also expected a strike to “amplify” the problems already facing Royal Mail as customers redouble efforts to reduce mailouts and use rival package delivery services.
“A key selling point of Royal Mail’s service has been its reputation for operational robustness and reliability, which can only be tarnished by industrial action,” said Liberum, which repeated “sell” advice and a 385p target.
A holiday in the US meant the wider market struggled for direction with the FTSE 100 slipping 0.4 per cent, or 27.03 points, to 7,411.47 by the close.